Rating Rationale

Jaiprakash Power Ventures Limited

Rating placed on 'Watch Negative'

Rating Action

Total Bank Loan Facilities Rated	Rs.5600 Crore
Long Term Rating	Crisil EL 2/Watch Negative (Placed on 'Rating Watch with Negative Implications')

Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.

1 crore = 10 million

Refer to annexure for Details of Instruments & Bank Facilities

Detailed Rationale

Crisil Ratings has placed its rating on the long-term bank facilities of Jaiprakash Power Ventures Ltd (JPVL) on ‘Rating Watch with Negative Implications’.

The rating is driven by the Crisil Ratings assessment of probability of default (PD) and the loss-given default (LGD) estimation for the given instrument of JPVL.

The rating indicates very low expected loss (EL) over the life of the instrument given the moderate degree of safety regarding timely servicing of debt (PD) and high recovery prospects (or low LGD).

The rating action follows placing of the bank loan ratings of JPVL on negative watch after the announcement by JPVL that an application has been filed before the National Company Law Tribunal (NCLT) under the provision of section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against JPVL by the National Asset Restructuring Company Ltd (NARCL). The application alleges default of ~Rs 512 crore plus interest and other charges with respect to the corporate guarantee extended to Jaiprakash Associates Ltd (JAL).

Crisil Ratings has taken note of the NCLT hearing on April 20, 2026, wherein JPVL sought extension of time to file a reply to the application. The NCLT has provided JPVL time extension by two weeks to file its reply, and the next hearing is scheduled for May 22, 2026.

Crisil Ratings understands that in case the application filed by NARCL is accepted by NCLT, Corporate Insolvency Resolution Process (CIRP) will be initiated leading to appointment of an interim resolution professional (IRP) and imposition of moratorium on JPVL. In case the moratorium is imposed, JPVL will be exposed to uncertainty in meeting its debt obligation in a timely manner.

To mitigate this risk, JPVL made advance interest payment of Rs 30 crore for April 2026 on April 16, 2026. The management has articulated that JPVL will continue to prepay its monthly interest obligation before the NCLT hearing date. It is to be noted that JPVL has already prepaid its principal obligation due until September 2026. As per discussions with the management team of JPVL, the company is committed to ensuring that there will be no delays in servicing debt irrespective of the outcome of the NCLT hearing.

Crisil Ratings will continue to monitor developments in this matter. The rating will be removed from watch and a final rating action will be taken once Crisil Ratings has more clarity on the resolution of the NCLT issue and its impact on JPVL.

The application was filed by NARCL before the NCLT under the provisions of Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against JPVL, alleging a default of ~Rs 512 crore plus interest and other charges, in relation to the corporate guarantee extended to Jaiprakash Associates Ltd (JAL).

As per discussions with JPVL, the disputed amount pertains to the corporate guarantee extended by JPVL to JAL’s external commercial borrowing (ECB) from the State Bank of India (SBI), which was to be released by the SBI as per the framework agreement signed in April 2019 as one of the conditions of the restructuring plan of JPVL, which was implemented. SBI had sent a demand-cum-recall notice pertaining to the same in December 2023 and took the matter to the Debt Recovery Tribunal (DRT), New Delhi. The company has presented its stand in the DRT and the matter is still sub judice.

The moderate degree of safety factors in the steady business risk profile of JPVL driven by adequate sales tie-up and fuel availability risk for majority of the capacity and established track record of operations. The PD rating is supported by the presence of a debt service reserve account (DSRA) and healthy liquidity. These strengths are partially offset by average financial risk profile constrained by sizeable capital expenditure (capex) planned over the medium term and susceptibility of cash flow to weak financial risk profiles of counterparties.

The high recovery prospect (or low LGD) on the rated debt is driven by the presence of long-term power purchase agreement (PPAs) for around 56% of the capacity and commensurate fuel tie-ups for around 64% capacity. These strengths are partially offset by the fact that a large part of its capacity remains untied (975 megawatt [MW]) and dependent on short-term markets, which are witnessing healthy rates. However, this exposes the company to vagaries of short-term markets (including merchant) such as subdued margins and dependence on electronic auctions (e-auctions) for coal supply. The company also remains vulnerable to the weak credit risk profile of counterparties. This may impact the valuation of the power plant at the time of resolution.

Key Rating Drivers - Strengths

Adequate sales tie-up and fuel availability for majority of the capacity

The 400 MW hydro plant at Vishnuprayag, Uttarakhand, has a long-term PPA for its entire capacity with Uttar Pradesh, and the unit has demonstrated consistent recovery of capacity charges.

The Bina thermal power plant (installed capacity 500 MW) has PPAs of 25 years for 70% of the capacity with MP Power Management Company Ltd (MPPMCL). The fuel supply agreement of 1.5 million tonne per annum (MTPA) for the plant is in place. This caters to around 68% of the plant requirement, while the balance is met through e-auctions. Despite a relatively higher PPA, the plant falls back on the merit order due to its distance from mines, leading to high fuel costs.

The Nigrie thermal plant (installed capacity 1,320 MW) has long-term PPAs, valid for 20 years, covering 37.5% of the capacity (495 MW) with MPPMCL. For fuel security, the company has a captive Amelia coal mine in Madhya Pradesh on reverse bidding of Rs 712 per tonne. The mine accounts for 3.92 MTPA of the 5.7 MTPA fuel requirement; the balance is met through e-auctions. Furthermore, the Nigrie plant is in the coal belt and sources most of its coal requirement from the captive mine, hence, procurement cost is much lower than the Bina plant, leading to a competitive edge for supply in merchant markets.

That said, JPVL has a diverse portfolio of thermal and hydro power plants, along with cost plus PPAs, for around 56% of the capacity. This is supported by the proximity of its thermal power plants to coal mines. Nevertheless, the ability to enter new PPAs at remunerative tariffs will remain monitorable.

Strong financial risk profile with sizeable debt reduction

After restructuring of debt in April 2019, total debt reduced to Rs 4,870 crore (including long-term debt of Rs 4,361 crore) as on December 31, 2022, from Rs 11,149 crore (including working capital) as on March 31, 2019. As on March 31, 2025, total debt was Rs 3,755 crore (term loan and fund-based working capital limit). This contributed to JPVL’s debt reducing to Rs 1.7 crore per MW, which is one of the lowest among its peers. However, JPVL plans to undertake capex of around Rs 750 crore over the medium term, for which it might not tie up debt and utilise its free cash reserve. The ability of the company to arrange funding from internal sources will be monitorable. Furthermore, the rating draws strength from a DSRA equivalent to three months of debt servicing in the form of cash worth Rs 210 crore and unencumbered cash of Rs 1,927 crore as on September 30, 2025.

Established track record of operations

The Vishnuprayag plant has consistently demonstrated plant availability factor (PAF) of over 99%, well above normative levels, for the past five fiscals ensuring full recovery of costs. The Nigrie thermal plant also reported PAF of 90% in fiscal 2025 (93% in fiscal 2024) while plant load factor (PLF) was healthy at 81% (85% in fiscal 2024) despite the lower quantum of PPAs. Also, the Bina plant reported PAF of 83% in fiscal 2025 (90% in the previous fiscal). PAF for all three plants is expected to remain above normative levels over the medium term.

Key Rating Drivers - Weaknesses

Risk of cash outflow from crystallisation of contingent liabilities in the form of Right to recompense and DMG allegations

There are certain contingent liabilities, given various show cause and demand notices (amounting to Rs 7,167 crore) issued by the DMG alleging illegal extraction, storing, transportation and selling of sand. The High Court of Andhra Pradesh has given an interim stay on Rs 2,147 crore, and for the balance amount, the company has filed its reply with DMG. Furthermore, a Right to recompense clause is present in the framework agreement signed in 2019, discussions pertaining to which are still ongoing. Both the issues are evolving and will be key rating sensitivity factors.

Exposure of cash flow to weak financial risk profiles of counterparties

Exposure to receivables collection risk persists given the weak credit risk profiles of key consumers, who are primarily state distribution companies (discoms). The Nigrie and Bina plants have PPAs with MPPMCL, and Vishnuprayag with Uttar Pradesh. While overall receivables have reduced to 56 days as on March 31, 2025, from 64 days as on March 31, 2024, exposure continues to be around Rs 1,000 with a sizeable chunk of disputed receivables. Any further build-up of receivables or delayed collection from counterparties, weakening the credit risk profile, will be a key rating sensitivity factor.

Vulnerability to merchant markets for the untied capacity

The company has demonstrated its ability to sell the untied capacity at healthy margins in short-term markets in the past because of low cost of generation at its Nigrie plant owing to its proximity to coal mines, and the ability to capture healthy peak rates. Given that 44% of the overall capacity is untied as of date, JPVL remains exposed to volatility in volume and margin in short-term markets, which depend on various factors such as peak power deficit, coal prices and its availability. The ability to tap into short-term markets at healthy volume and margin remains monitorable.

Filing of application in NCLT against JPVL; CIRP ongoing for JAL

Pursuant to the petition filed by ICICI Bank Ltd under the IBC 2016, NCLT has admitted JAL into CIRP, through its order dated June 3, 2024. JAL is the promoter entity of JPVL and holds 24% stake in the latter. Furthermore, JPVL had extended a corporate guarantee to JAL’s ECB from SBI (which is now converted to rupee term loan).

This debt was transferred to NARCL, which has filed an application before the NCLT against JPVL, alleging default of ~Rs 512 crore plus interest and other charges, in relation to the corporate guarantee. As per discussions with JPVL, the application is yet to be admitted. SBI had sent a demand-cum-recall notice pertaining to the same in December 2023 and took the matter to DRT. The company has represented its stand in the DRT and the matter is still sub judice. The admission of application by NCLT or any potential cash outflow arising from the crystallisation of the corporate guarantee could have a bearing on the liquidity of JPVL and will be a key rating sensitivity factor.